(Edits, adds graphic)
By Ghazwan Hassan
TIKRIT, Iraq, June 11 (Reuters) - Sunni insurgents from an al Qaeda splinter group extended their control from the northern city of Mosul on Wednesday to an area further south that includes Iraq's biggest oil refinery in a devastating show of strength against the Shi'ite-led government.
Security sources said militants from the Islamic State in Iraq and the Levant (ISIL) - Sunni militants waging sectarian war on both sides of the Iraqi-Syrian frontier - drove into the town of Baiji late on Tuesday in armed vehicles, torching the court house and police station after freeing prisoners.
The militants offered safe passage to some 250 men guarding the refinery on the outskirts of Baiji, about 200 kilometres south of Mosul, on condition they leave.
Iraq's Foreign Minister Hoshyar Zebari called on his country's leaders to come together to face "the serious, mortal" threat. "The response has to be soon. There has to be a quick response to what has happened," he said during a trip to Greece.
Zebari said Baghdad would work with forces from the nearby Kurdish autonomous region to drive the fighters from Mosul.
Baiji resident Jasim al-Qaisi said the militants had also asked senior tribal chiefs in Baiji to persuade local police and soldiers not to resist their takeover.
"Yesterday at sunset some gunmen contacted the most prominent tribal sheikhs in Baiji via cellphone and told them: 'We are coming to die or control Baiji, so we advise you to ask your sons in the police and army to lay down their weapons and withdraw before (Tuesday) evening prayer'."
The Baiji refinery can process 300,000 barrels per day and supplies oil products to most of Iraq's provinces and is a major provider of power to Baghdad. A worker there said the morning shift had not been allowed to take over and the night shift was still on duty.
The push into Baiji began hours after ISIL overran Mosul, one of the great Sunni historic cities, advancing their aim of creating a Sunni Caliphate straddling the border between Iraq and Syria.
For a map showing al Qaeda's affiliates and areas of operation: http://graphics.thomsonreuters.com/RNGS/2014/JUNE/QAEDA.jpg
ISIL has become a dominant player in Iraq and Syria where it has seized a string of cities over the past year, often fighting other Sunni groups.
An estimated 500,000 Iraqis have already fled Mosul, home to some 2 million people, and the surrounding province, the International Organisation for Migration said on Wednesday.
The fall of Mosul is a slap to Baghdad's efforts to quash Sunni militants who have regained ground and strength in Iraq over the past year, seizing Sunni towns of Falluja and parts of Ramadi in the desert west of Baghdad at the start of the year.
The United States, which pulled its troops out from Iraq to and half years ago, pledged to help Iraqi leaders "push back against this aggression" as the government of Prime Minister Nuri al-Maliki asked parliament to declare a state of emergency.
It said Washington would support "a strong, coordinated response", adding that "ISIL is not only a threat to the stability of Iraq, but a threat to the entire region".
ISIL control in the Sunni Anbar province as well as around Mosul in the north, would help the Islamist group consolidate its grip along the frontier with Syria, where they are fighting President Bashar al-Assad, an ally of Shi'ite Iran.
Fleeing residents said ISIL fighters were leaving their stamp everywhere in the cities they seized, planting their black flags and banners on police stations, army barracks and other government buildings.
"They are all masked, but they don't do us any harm," said a 13-year old schoolboy, describing the militants who pushed into his hometown of Mosul.
A 40-year old man who fled Mosul with his family said: "We are frightened because we don't know who they are. They call themselves the revolutionaries. They told us not to be scared and that they came to liberate and free us from oppression."
Critics say the failure of Maliki, a Shi'ite Muslim in power for eight years, to address grievances among the once dominant Sunni minority led to a rise in Sunni militancy and pushed Sunni groups and tribes to rally behind ISIL.
Many Sunnis feel disenfranchised and some have made common cause with foreign Islamist radicals, first against the U.S. troops that overthrew Sunni dictator Saddam Hussein in 2003 and now Shi'ite-led Iraqi forces.
Most families fled north towards the nearby Kurdistan region, where Iraq's ethnic Kurds have autonomy and their own large and disciplined military force, the Peshmerga.
Some officials in Baghdad spoke of seeking help for Mosul from Kurdish Peshmerga, which have long been a force in the jockeying between Shi'ites, Kurds and Sunnis for influence and, especially, for control of oilfields in the north of Iraq.
Two officials in the ministry of Peshmerga said on Wednesday that there was no military coordination between Baghdad and Arbil, but that on the ground locally there was some coordination between Iraqi army and Kurdish forces.
Peshmerga now control the Rabia area on the border with Syria after the Iraqi army allowed them to deploy there and also the Kusk base, 45 km west of Mosul, and some other brigade headquarters
Asked whether the Peshmerga would try to enter Mosul, Halgurd Hikmat, media officer at ministry of Peshmerga, said that depended on the President of the region and that a formal request would have to be made by Maliki, who is commander of the Iraqi armed forces.
ISIL, led by Abu Bakr al-Baghdadi, broke with al Qaeda's international leader, Osama bin Laden's former lieutenant Ayman al-Zawahri, and has clashed with al Qaeda fighters in Syria.
The group, originally rooted in austere Sunni groups like the Tawhid, fought US and Iraqi forces after Saddam's fall and the Shi'ite rise to power that ending decades of Sunni rule. ISIL regards Shi'ites as heretics.
ISIL posted photographs of its fighters wearing black balaclavas on its "Nineveh State" Twitter account, interspersed with verses from the Koran. The group dubbed the Mosul offensive "Enter Upon Them Through The Gates".
In a newsletter, ISIL enjoined Sunnis to join them in the fight against Maliki's "Safavid" army - a reference to the Persian dynasty that promoted Shi'ite Islam.
"Join the ranks oh brothers!" ran one slogan. "Maliki's tyrannical strength no match for pious believers."
In the province of Salahuddin, they overran three villages in the Shirqat district, torching police stations, town halls and local council buildings before raising the ISIL banner.
Nearly 800 people were killed in violence across Iraq in May - the highest monthly death toll so far this year. Last year was the deadliest since the sectarian bloodletting of 2006-07. (Additional reporting by Raheem Salman; Writing by Isabel Coles; Editing by Samia Nakhoul and Anna Willard)